Economists warn against the diminishing credibility of the financial system in Poland

Economists from the Warsaw School of Economics are preparing the Economic Credibility Index, which is to show how reliable our country is compared to other European economies.

"In the area of monetary stability and the financial system, the economic credibility of the state has deteriorated recently," one of the professors of this university, former member of the Monetary Policy Council, member of the Society of Polish Economists, Dr. hab. Andrzej Rzońca, assessed.

In his opinion, the current Monetary Policy Council (RPP), which maintains ultra-low interest rates with inflation not seen for two decades, undermines the confidence of entrepreneurs and makes them refrain from investing.

"Within the team dealing with the measurement of the economic credibility of the state, I deal with the area of ​​money and financial system stability. In this area, the economic credibility of the state has deteriorated recently. This is indicated by both the measures directly related to credibility and indirect measures focusing on the effects of credibility, possibly lack of it, and finally also the measures relating to threats to the stability of the financial system and monetary stability,” Dr. hab. Andrzej Rzońca stressed.

In August this year. prices increased the most since June 2001 - by 5.5 percent. Every year. Meanwhile, from June 2020, the main interest rate is 0.1%, which makes real rates strongly negative. Although economists admit that some of the factors causing the price jump are independent of the MPC, as they occur in many global markets, they also see demand factors, which is difficult to see in the rhetoric of central bankers.

"Credibility is the basis of trust. Without trust, it is difficult to calculate well, and without calculation, investing, like any other decision in the economic sphere, is burdened with a higher risk. We in our country have a problem with investments, their share has been lower than in many years. other economies of our region. In the last year, the share of private investment fell to a level unobserved since 1993, and thus for over a quarter of a century," a member of the Society of Polish Economists recalled.

(Newseria)